The Emotional Hedge

The Emotional Hedge.

Markets can be chaotic. But sometimes, so can sports.

A friend stayed with me this week. Big Arsenal fan, also a bit of a gambler.

We watched the Champions League game against Real Madrid — a stunning 3-0 win for Arsenal.

Naturally, I assumed he’d be celebrating and cashing in. But to my surprise, he’d actually lost money - he’d bet on Real Madrid to win.

His logic? If Arsenal lost, at least he’d win some cash. If they won, he was happy to “pay” for the joy. A win-win.

It’s a classic emotional hedge — trading happiness for money and vice versa.

In markets, we try to stay emotionless. In sports? Not so easy.

Could you ever bet against your own team?